In a move that will protect it from the Taliban and be used to help stabilise Afghanistan’s crumbling economy, the United States announced on Wednesday that it will transfer $3.5 billion in assets from the Afghan central bank into a new trust fund based in Switzerland.
The Afghan Fund, overseen by a board of trustees, could finance the printing of new money, cover debt payments to international financial institutions, pay for essential imports like power, and secure Afghanistan’s eligibility for development funding.
The US Treasury stated in a statement that “the Afghan Fund would protect, conserve, and make targeted disbursements of that $3.5bn to assist give greater stability to the Afghan economy.
“US officials declared that until the Afghan central bank, also known as DAB, is “free of political interference” (diplomatic jargon for replacing the bank’s top Taliban officials, two of whom are subject to US and UN sanctions), and anti-money laundering safeguards are put in place, no funds will be sent there.The new fund has an account with Basel’s Bank for International Settlements (BIS), which offers financial services to central banks, and is headquartered in Geneva.
The Fund for the Afghan People and the BIS are developing a business relationship. The BIS added that it would abide by all relevant fines and laws. “The BIS role is limited to providing banking services to and carrying out the directives of the Board of Trustees of the Fund without involvement in the Fund’s governance or decision-making.
The fund won’t end the major issues fueling the severe economic and humanitarian difficulties that are likely to get worse as winter draws near. The United Nations estimates that about half of Afghanistan’s 40 million population suffers from “acute hunger.”